Oil transportation firms pay little into state spill fund

Scott Waldman

ALBANY—Two Fortune 500 companies that transport most of the crude oil through New York are contributing to the state's oil spill fund at a much lower rate than other energy companies, state records show.

The fund is the first line of defense against the tremendous costs associated with an oil train derailment. However, it's so underfunded that it would do little to mitigate the actual cost of a major accident like those that have occurred in Canada, North Dakota and Virginia in the last year, some legislators say.

Last year, Global Partners and Buckeye Partners, two companies that bring billions of gallons of crude oil through New York by train and by boat, contributed more than a third of the total $20 million fund. But at the same time, the two companies pay about 12 times less into the fund for crude oil compared to other energy companies, according to the state Department of Environmental Conservation.

That's because the companies benefit from a loophole in the laws governing the state's oil spill fund since they largely transport, but don't sell, the oil in New York. Petroleum that's sold or consumed in the state is taxed at a rate higher than that for oil that's just transported through the state.

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